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China’s different methods of land circulation

China’s authorities want to improve the land circulation for rural citizens to promote urbanization and implement more efficient and large-scale farms, which can be managed and controlled much easier.


In the current situation, Chinese farmers are allowed to own long-term rights for small property, but they can lose the land easily if not managed in a proper way. This has led to informal leasing of lands and disturbed a sustainable market for farmland.


Rural land contracted management right is currently mainly circulated by the different options: subcontract, lease, lending, exchange, transfer, and shareholding. Looking at the year of 2014, the proportion of subcontract, lease, shareholding, exchange and transfer to the national land circulation in China has been 46.6%, 33.1%, 6.7%, 5.8% and 3.0% respectively.


The different terms and conditions can be confusing for outsiders, but even sometimes also for affected farmers. The main forms of land circulation can be explained like the following:


Subcontract refers to the lease of land contracted management right among farmers in the same rural collective economic organization. The subcontractor keeps property right of the land management right; the assignee enjoys the use right of the land contracted management right, gets profits and interests from the contracted land, and pays subcontract fees to the subcontractor. Subcontract is no need to get permissions from the rural collective economic organizations, but its documents shall be put on record to the organizations.


Lease means that farmers lease the land contracted management right to the people excluded from the same collective economic organization.


Shareholding means that for the purpose of developing agricultural economy, farmers may, at their free will, establish a joint group to which they contribute their right to operate the contracted land, engage in joint agricultural production and get dividends by shares. It is a cooperative circulation way instead of founding a company for agricultural operation.


About the article

The data and information for this article comes from CCM’s report Land Right in China Edition(1), a report, which provides a detailed overview of China’s land right and circulation with highlights in policy, development history, difficulties, and land management right.


Get insights in China’s hardly transparent land policy with the detailed report. Profit from many years of experience by experts of China’s agricultural industry.


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